Tesla shares dip as automaker racks up record loss

Tesla shares fell by around 1.5% in pre-market trading on Thursday after the company reported a mixed set of fourth-quarter results.

The electric automaker reported a record quarterly loss despite achieving a substantial jump in revenue.

Losses came to $675.4m for the final three months of 2017, up from $121.3m in the prior year´s quarter.

At the same time, revenues rose to $3.29bn from $2.28bn.

Target

Analysts took some comfort from the fact that Tesla did not use its fourth-quarter shareholder letter to warn of yet another delay to production targets for its new Model 3 electric car.

Difficulties surrounding Model 3 production have weighed on the shares over recent months.

“We continue to target weekly Model 3 production rates of 2,500 by the end of Q1 and 5,000 by the end of Q2,” said Tesla in the latest update.

Delays

Delays in production largely attributed to battery issues meant just 1,550 Model 3 cars were delivered in the fourth quarter.

Tesla had previously been expected to be delivering somewhere in the region of between 4,000 to 5,000 Model 3´s in the quarter.

Nevertheless, Tesla claimed production issues were steadily getting smaller and that shareholders could look forward to a positive operating income trend from some point in 2018.

Spending

Big spending on Model 3, but with deliveries having fallen well behind original targets, is the main reason why Tesla´s losses have spiralled.

Capital expenditures reached $787m in the fourth quarter and $3.4bn over the whole of 2017, with Tesla pointing to even higher expenditure over 2018.

The electric vehcile maker will also commence capital investments for its planned Model Y SUV towards the end of 2018.

Scrutiny

Tesla will come under intense scrutiny over the coming weeks as investors watch to see if it does meets its Model 3 production targets for the first and second 2018 quarters.

The shares have lost around 10% since June 2017, with the hiccups for the Model 3 counteracting good news on other fronts.

For instance, there´s been positive sentiment surrounding the launch of its electric truck division last November and the company´s claims of strong pre-orders for the unit´s Semi trucks.

“This year, we are starting a new chapter of our journey. Hundreds of thousands of people will switch to our EVs and many others will turn their houses into near self-sufficient energy generators. This is the year when we believe we can achieve true cost parity - producing a premium EV like the Model 3 will be no more expensive than producing an ICE vehicle, something that many believe is not yet possible,” said Tesla chief executive Elon Musk.

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